Flemish Government decides to strengthen equity of distribution system operators
The energy transition requires large-scale investments in the Flemish-Belgian distribution networks. It is essential that Flemish households, businesses, and public authorities can continue to rely on robust and future-proof energy infrastructure in the decades ahead. To finance these investments in a financially sound manner, the distribution system operators (DSOs)** will need additional equity in the coming years.
On 19 December, the Flemish Government decided that the Flemish authorities, through their investment company Participatiemaatschappij Vlaanderen (PMV), will contribute up to €1.56 billion to strengthen the equity of the Fluvius DSOs.
Under the framework established by the Flemish Government, the current shareholders — 285 Flemish cities and municipalities — will have the first option to make a new financial contribution to the DSOs themselves. If additional capital is still required, Flanders intends to directly contribute up to 20% of the equity per DSO. Should further equity be needed, the Flemish Government plans to purchase shares in Publi-T (and thus indirectly Belgian TSO Elia) from local authorities, enabling those authorities to reinvest those amounts in Fluvius.
On 22 December, the Fluvius System Operator Board of Directors convened following the Flemish Government’s decision.
Chairman Wim Dries commented on behalf of the Board:
““We welcome the Flemish Government’s clear position on equity contributions to the distribution system operators. We will now continue discussions with the Flemish authorities, also with a view to safeguarding the interests of local authorities. It is positive that the current shareholders are given the first opportunity to decide on a new capital contribution to Fluvius. This approach should ensure Fluvius remains strongly anchored locally.
The Flemish Government has also decided to reform the landscape of distribution system operators by 2031 at the earliest, and by 2037 at the latest, moving toward a single DSO for all of Flanders. The Fluvius Board of Directors takes note of this decision but emphasizes that, given the nature of Fluvius’ activities—public works in virtually every street in Flanders—close ties with local authorities are essential. The Board will continue to safeguard this concern in the coming years.
We are pleased that the Flemish Government has explicitly stated that maximum consideration will be given to the support of local authorities.”
** Being the asset companies of Fluvius System Operator that hold the licenses for the distribution activities